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Can the creditor ask for production of documents during Chapter 13?
Anonymous2 views3 answers
I am the creditor and the debtor filed Chapter 13. He is using his LLC bank account (he's the only member) for personal expenses, and is claiming business expenses that are questionable at best to reduce the income in his Chapter 13 schedule. How do I request documents and receipts to prove that his true income is much higher than he claims and he overstates or flat out lies about the expenses? Is the right to discovery only if adversary proceedings is filed or can I get it without having to file adversary proceedings (if so, under what rule/authority?
You have the right to discovery even if an adversary proceeding is not filed. There are proceedings called "contested matters" which allow parties to obtain discovery. The most common contested matter is an objection to a creditor claim. Bankruptcy Rule 9014 contains the procedures for deciding contested matters. You may want to see if you can obtain information from third parties (e.g. tax returns are required to be filed) and you should be able to get a copy from the trustee.
If you are a creditor you can object to confirmation. You should provide any evidence to the Chapter 13 Trustee who has the obligation to review the claimed expenses if you do not want to pay an attorney to help you.
I suggest that you have good documents and proof before you go down this road.
If you believe that there is fraud involved, contact the U.S. Trustee and the Chapter 13 trustee with the information that you have. You can request what is known as a 200 examination and ask about information that affects you and your claim. I would suggest getting a lawyer to do that, but you can talk to the UST yourself.
The UST and the Chapter 13 Trustee can request documents or audit the case.
